[lmr2wil]

Not that MT-90/MTL is good or bad - I've never used it in the E46; but, in this case, ATF is jut a label. Read the application guide on Redline's website. They specifically state that D4 works in your car (as many of us on here can attest to). My point is, don't decide not to use D4 since they called it an ATF. Decide this based on your needs.

Luke

 

[lmr2wil]

There is a separate cooling loop for the power steering system behind the radiator - see #10 in http://www.realoem.com/bmw/showparts.do?model=BM53&mospid=47712&btnr=32_0958&hg=32&fg=20 for reference. This is likely what is leaking on your car (as WDE46 already said). The power steering system in these cars uses ATF, so this is why the fluid looks and smells as it does.

Luke